News: 18th February 2014

BRC puts forward 'ground-breaking' business rate reform ideas

The British Retail Consortium (BRC) has unveiled plans to radically overhaul the existing UK business rates system, including a move to charge businesses based on energy usage.

The BRC hopes the proposals will stimulate further debate on reform that "goes beyond tinkering with the existing system".

They, along with other leading business groups, had long felt the existing system of business rates "creates disincentives for investment in property".

Helen Dickinson, chief executive of the BRC, said: "[This is a] once in a generation chance to fundamentally change the business rates system and the time is right to think creatively and in the best long-term economic interests of the UK."

The BRC believes the system should shift the basis for taxing property by replacing the current system with a tax based on a separate measure such as energy usage. Another suggested amendment would reward levels of employment, giving a discount on rates based on a given value per employee, which would subsequently be capped.

Additional measures suggested which could support successful businesses further include discounts based on the percentage of Corporation Tax payment and modernising the existing system by introducing a simplified, banded revaluation system, including revaluations on a more consistent basis.

Dickinson added: "These potential options would be good for the public, the economy and businesses small and large, while still providing significant tax revenues for the government."

The BRC insisted the modernisation of the business rates system alone would not be "effective action to remove the disincentive to invest in property", but that additional suggestions could be put forward based on a modernised approach.

John Rogers, chief financial officer of J Sainsbury, who chaired the group of executive-level industry figureheads leading the BRC’s project, commented: "The current system is outdated and cumbersome and does nothing to encourage retailers to invest.

"We believe we can do better for business and for tax payers and these options represent tangible progress in the debate on what reform could look like if we think about retail in the future, rather than the past."